SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[X] Filed by registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
JARDEN CORPORATION
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(Name of Registrant as Specified in its Charter)
---------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount previously paid:
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2) Form, schedule or registration statement No.:
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3) Filing party:
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4) Date filed:
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JARDEN CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 11, 2004
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders,
and any adjournments or postponements thereof (the "Meeting"), of Jarden
Corporation (the "Company"), which will be held on Tuesday, May 11, 2004 at
10:00 A.M., local time, at 555 Theodore Fremd Avenue, Rye, New York 10580, for
the following purposes:
1. To elect two (Class II) directors to serve on the Board of
Directors for a term of three years expiring at the 2007 annual
meeting of stockholders or until their successors are duly elected
and qualified (Proposal 1);
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 2004
(Proposal 2); and
3. To transact such other business as may properly be brought before
the Meeting.
Stockholders of record at the close of business on April 8, 2004 shall
be entitled to notice of and to vote at the Meeting. A copy of the Annual Report
of the Company for the year ended December 31, 2003 is being mailed to
stockholders along with the attached Proxy Statement.
YOUR VOTE IS IMPORTANT. PLEASE SUBMIT A PROXY AS SOON AS POSSIBLE SO
THAT YOUR SHARES CAN BE VOTED AT THE MEETING. SUBMITTING THE ENCLOSED FORM OF
PROXY WILL APPOINT MARTIN E. FRANKLIN AND IAN G.H. ASHKEN AS YOUR PROXIES. YOU
MAY SUBMIT YOUR PROXY BY MAIL. YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF
YOU DECIDE TO ATTEND THE MEETING. FOR INSTRUCTIONS, PLEASE REFER TO PAGE 2 OF
THE PROXY STATEMENT OR THE PROXY CARD.
By order of the Board of Directors
/s/ Martin E. Franklin
---------------------------------
Martin E. Franklin
Chairman and
Chief Executive Officer
April 13, 2004
JARDEN CORPORATION
555 THEODORE FREMD AVENUE
RYE, NY 10580
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 11, 2004
INTRODUCTION
PROXY SOLICITATION AND GENERAL INFORMATION
This Proxy Statement and the enclosed form of proxy (the "Proxy Card")
are being furnished to the holders of common stock (the "Stockholders"), par
value $.01 per share (the "Common Stock"), of Jarden Corporation, a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors (the "Board" or "Board of Directors") of the Company for
use at the Annual Meeting of Stockholders to be held on Tuesday, May 11, 2004 at
555 Theodore Fremd Avenue, Rye, New York 10580 at 10:00 A.M., local time, and at
any adjournment or postponement thereof (the "Meeting"). This Proxy Statement
and the Proxy Card are first being sent to Stockholders on or about April 15,
2004. Although the Annual Report and Proxy Statement are being mailed together,
the Annual Report shall not be deemed to be part of this Proxy Statement.
At the Meeting, Stockholders will be asked:
1. To elect two (Class II) directors to serve on the Board of
Directors for a term of three years expiring at the 2007 annual
meeting of Stockholders or until their successors are duly elected
and qualified (Proposal 1);
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 2004
(Proposal 2); and
3. To transact such other business as may properly be brought before
the Meeting.
The Board of Directors has fixed the close of business on April 8, 2004
as the record date for the determination of Stockholders entitled to notice of
and to vote at the Meeting. Each such Stockholder will be entitled to one vote
for each share of Common Stock held on all matters to come before the Meeting
and may vote in person or by proxy authorized in writing.
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PROXIES AND VOTING
Common Stock represented by properly executed proxies received by the
Company and not revoked will be voted at the Meeting in accordance with
instructions contained therein. If the Proxy Card is signed and returned without
instructions, the shares will be voted FOR the election of each nominee for
director named herein (Proposal 1), and FOR the ratification of the appointment
of Ernst & Young LLP as the Company's independent auditors for the year ending
December 31, 2004 (Proposal 2).
Voting
Stockholders are requested to complete, sign, date and promptly return
the Proxy Card in the enclosed envelope.
Most beneficial owners whose stock is held in street name do not
receive the Proxy Card. Instead, they receive voting instruction forms from
their bank, broker or other agent. Beneficial owners may also be able to vote by
telephone or the Internet. Beneficial owners should follow the instructions on
the voter instruction form or proxy ballot they receive from their bank, broker
or other agent.
The method of voting used will not limit a Stockholder's right to
attend the Meeting.
Revocation of Proxy
A Stockholder who so desires may revoke his proxy at any time before it
is voted at the Meeting by: (i) delivering written notice to the Company
(attention: Corporate Secretary); (ii) delivering a proxy that is dated later;
or (iii) casting a ballot at the Meeting. Attendance at the Meeting will not in
and of itself constitute a revocation of a proxy. Beneficial owners who hold
their stock in street name cannot revoke their proxies in person at the Meeting
because the Stockholders of record who have the right to cast the votes will not
be present. If they wish to change their votes after returning voting
instructions, beneficial owners should contact their bank, broker or other agent
before the Meeting to determine whether they can do so.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
Only Stockholders as of the close of business on April 8, 2004 (the
"Record Date") are entitled to notice of and to vote at the Meeting. As of the
Record Date, there were 27,189,782 shares of Common Stock outstanding and
entitled to vote, with each share entitled to one vote.
QUORUM; REQUIRED VOTES
The presence at the Meeting, in person or by duly authorized proxy, of
the holders of a majority of the shares of stock entitled to vote constitutes a
quorum for this Meeting. Each share of Common Stock entitles the holder to one
vote on each matter presented for Stockholder action.
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Abstentions and broker "non-votes" are counted as present and entitled
to vote for purposes of determining whether a quorum exists. A broker "non-vote"
occurs when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received voting instructions from the
beneficial owner.
The affirmative vote of a plurality of the votes present in person or
represented by proxy and entitled to vote is necessary for the election of
directors (Proposal 1). The affirmative vote of a majority of the votes present
in person or represented by proxy and entitled to vote is necessary for the
ratification of the appointment of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 2004 (Proposal 2).
Since the affirmative vote of a plurality of votes present in person or
represented by proxy and entitled to vote is required for the election of
directors (Proposal 1), abstentions and "broker non-votes" will have no effect
on the outcome of such election. Since the affirmative vote of a majority of the
votes present in person or represented by proxy and entitled to vote is
necessary for the ratification of the appointment of independent auditors
(Proposal 2), abstentions will have the same effect as a negative vote, but
"broker non-votes" will have no effect on the outcome of such matter.
Votes at the Meeting will be tabulated by an inspector of elections
appointed by the Company or the Company's transfer agent.
PROXY SOLICITATION
The Company will bear the costs of the solicitation of proxies for the
Meeting. Directors, officers and employees of the Company may solicit proxies
from Stockholders by mail, telephone, telegram, personal interview or otherwise.
Such directors, officers and employees will not receive additional compensation
but may be reimbursed for out-of-pocket expenses in connection with such
solicitation. We may engage a proxy solicitation firm to assist us in the
distribution and solicitation of proxies.
In accordance with the regulations of the Securities and Exchange
Commission (the "SEC") and the New York Stock Exchange (the "NYSE"), we also
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for their expenses incurred in sending proxies and proxy materials to beneficial
owners of Common Stock as of the Record Date.
LIST OF STOCKHOLDERS
In accordance with Delaware law, a list of Stockholders entitled to
vote at the Meeting will be available at the Meeting and for ten days prior to
the Meeting, between the hours of 10:00 a.m. and 5:00 p.m., local time, at our
offices at 555 Theodore Fremd Avenue, Rye, NY 10580.
IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE
STOCKHOLDERS' INTERESTS BE REPRESENTED AT THE MEETING. THEREFORE, EVEN IF YOU
INTEND TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO DELIVER A PROXY TO
ENSURE THAT YOUR STOCK WILL BE REPRESENTED. IF YOU ARE PRESENT AT THE MEETING
AND DESIRE TO DO SO, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON BY GIVING
WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY. PLEASE DELIVER YOUR PROXY
PROMPTLY.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our Common Stock as of March 31, 2004, by (i) each person or entity
known to us owning beneficially 5% or more of our Common Stock, (ii) each of our
directors and nominees for directors, (iii) each of our executive officers and
(iv) all directors and executive officers as a group. Unless otherwise noted,
shares are owned directly or indirectly with sole voting and investment power.
Shares Beneficially
Name and Address Owned (1) Percent (2)
- ---------------- --------- -----------
FMR Corp., Edward C. Johnson 3d, Abigail P. Johnson, as a group
82 Devonshire Street
Boston, MA 02109.................................................. 2,937,470(3) 10.8%
Wellington Management Company, LLP
75 State Street
Boston, MA 02109.................................................. 2,003,950(4) 7.4%
Martin E. Franklin................................................ 1,498,256(5) 5.5%
Ian G.H. Ashken................................................... 426,189(6) 1.6%
Rene-Pierre Azria................................................. 37,000(7) *
Desiree DeStefano................................................. 30,166(8) *
Douglas W. Huemme................................................. 48,025(9) *
James E. Lillie................................................... 57,600 *
Richard L. Molen.................................................. 48,600(10) *
Lynda W. Popwell.................................................. 50,775(11) *
Irwin D. Simon.................................................... 36,000(12) *
J. David Tolbert.................................................. 26,047 *
Robert L. Wood.................................................... 81,000(13) *
All directors, nominees for directors, and executive officers as a
group (11 persons)................................................ 1,969,720(14) 7.1%
- ---------------
* Less than 1%
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any share of Common Stock that such person has the right
to acquire within 60 days. The number of shares beneficially owned
reflected in this table and in the footnotes thereto give effect to the
3-for-2 split of our shares of Common Stock pursuant to which
Stockholders of record at the close of business on November 12, 2003
received, on or about November 26, 2003, one additional share of our
Common Stock for every two shares of our Common Stock held.
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(2) Percent of class is based on the Common Stock outstanding and entitled
to vote as of March 31, 2004. There were 27,189,782 shares outstanding
and entitled to vote as of March 31, 2004.
(3) Based solely on Schedule 13G filed with the SEC on February 17, 2004.
(4) Based solely on Schedule 13G filed with the SEC on February 12, 2004.
(5) Includes 187,501 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days. Also includes
369,938 shares of Common Stock held by Mr. Ashken of which Mr. Franklin
disclaims beneficial ownership. Mr. Franklin entered into a voting
agreement, dated as of August 22, 2002, with Mr. Ashken, pursuant to
which Mr. Franklin has the power to vote, or direct the vote, over all
of these 369,938 shares of Common Stock.
(6) Includes 56,251 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days. Excludes 18,500
shares of Common Stock gifted to a charitable foundation for which Mr.
Ashken is a director, of which Mr. Ashken disclaims beneficial
ownership. Additionally, Mr. Ashken entered into a voting agreement,
dated as of August 22, 2002, with Mr. Franklin, pursuant to which Mr.
Franklin has the power to vote, or direct the vote, over 369,938 shares
of Common Stock beneficially owned by Mr. Ashken.
(7) Includes 36,000 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days.
(8) Includes 26,250 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days.
(9) Includes 46,000 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days.
(10) Includes 27,000 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days.
(11) Includes 49,500 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days.
(12) Includes 35,000 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days.
(13) Includes 78,000 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days.
(14) Includes 541,502 shares subject to outstanding options to purchase
Common Stock which are exercisable within 60 days.
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INFORMATION REGARDING
BOARD OF DIRECTORS AND COMMITTEES
STATEMENT ON CORPORATE GOVERNANCE
The Company maintains formal corporate governance standards. The
Company has reviewed internally and with the Board of Directors the provisions
of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act"), the rules of the SEC
and the NYSE's new corporate governance listing standards regarding corporate
governance policies and processes and are in compliance with the rules and
listing standards. Since the last annual meeting, we have adopted charters for
our Compensation Committee and Nominating and Policies Committee and implemented
a Board Governance and Conduct Policy. Additionally, we have recently amended
the charter of the Audit Committee and our Business Conduct and Ethics Policy.
You can access all of these documents on the "Corporate Governance" page of the
"Investor Relations" section of the Company's website, www.jarden.com, or by
writing to us at Jarden Corporation, 555 Theodore Fremd Avenue, Rye, NY 10580,
Attention: Investor Relations.
In accordance with NYSE corporate governance listing standards, our
Board Governance and Conduct Policy requires the Board to designate a
non-executive lead director to preside over non-executive sessions and perform
any duties more appropriately performed by an independent director which would
otherwise be performed by the Chairman of the Board. Irwin D. Simon has been
designated as the Lead Independent Director. The Company's non-management
directors meet at least once per year in a non-executive session without
management at which Mr. Simon presides. Stockholders and other interested
parties may communicate with the Company's Lead Independent Director or the
non-management directors as a group either by writing to Irwin D. Simon, c/o
Jarden Corporation Corporate Secretary, 555 Theodore Fremd Avenue, Rye, NY 10580
or sending an e-mail to BOD@jarden.com. Correspondence will be forwarded to Mr.
Simon promptly.
Our Board Governance and Conduct Policy requires that a majority of the
directors satisfy the independence requirements of the SEC and the NYSE. In
general, "independent" means that the director shall have no material
relationship with the Company or any member of the senior management of the
Company. In performing their duties, directors must hold themselves free of any
interest, influence or relationship with respect to any activity which could
impair their judgment or objectivity in the course of their service to the
Company. The policy establishes a mandatory retirement age of 70 for independent
directors. It also urges independent directors with more than one year of
service to own at least 1,000 shares of common stock of the Company. Except for
Martin E. Franklin and Ian G.H. Ashken, each of the Board members meets the
aforementioned independence standards. Messrs. Franklin and Ashken do not meet
the aforementioned independence standards because they are the current Chairman
and Chief Executive Officer and Vice Chairman, Chief Financial Officer and
Secretary, respectively, of the Company.
In addition to the foregoing, our Board Governance and Conduct Policy
also provides for:
o reviewing and approving a succession plan for the Chief
Executive Officer of the Company at least annually;
o the Board of Directors reviewing and assessing its own
performance at least annually; and
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o the right of the Board to hire its own advisors to assist it in
performing its duties without obtaining the approval of
management.
A copy of our Board Governance and Conduct Policy is set forth as Annex A to
this Proxy Statement.
COMMITTEES OF THE BOARD
During 2003, the Board of Directors held nine meetings. The Board of
Directors had standing Compensation, Nominating and Policies, and Audit
Committees. During 2003, all of the directors then in office attended at least
75% of the total number of meetings held by the Board of Directors and by the
Committees of the Board of Directors on which they served. Attendance at Board
and committee meetings during fiscal 2003 averaged 93% for incumbent directors
as a group. The Compensation and Nominating and Policies Committees do not meet
on a regular basis, but only as circumstances require.
COMPENSATION COMMITTEE
The Compensation Committee reviews recommendations for executive
compensation, including incentive compensation and stock option plans and makes
recommendations to the Board of Directors concerning levels of executive
compensation and adoption of incentive and stock option plans. The Compensation
Committee consists of Messrs. Molen (Chairman), Simon and Wood. The Compensation
Committee met six times during 2003.
NOMINATING AND POLICIES COMMITTEE
The purpose of the Nominating and Policies Committee is to identify,
evaluate and nominate qualified candidates for election to the Board of
Directors. The Nominating and Policies Committee will consider nominees
recommended by Stockholders. The names of such nominees should be forwarded to
Ian G.H. Ashken, Corporate Secretary, Jarden Corporation, 555 Theodore Fremd
Avenue, Rye, New York 10580, who will submit them to the committee for its
consideration. See the section titled "Other Matters - Proposals by
Stockholders" for more information on Stockholder nominations of candidates for
election to the Board of Directors.
The Nominating and Policies Committee is also responsible for
developing and recommending to the Board a set of corporate governance
principles and periodically reviewing and reassessing the adequacy of those
principles and recommending any proposed changes to the Board for approval, and
advising the Board on corporate governance matters as they arise.
The Nominating and Policies Committee consists of Messrs. Huemme
(Chairman), Molen and Simon. The Nominating and Policies Committee met once
during 2003.
AUDIT COMMITTEE
The Audit Committee consists of Mr. Azria (Chairman), Ms. Popwell and
Mr. Wood. Each of the Audit Committee members satisfies the definition of
independent director as established in the NYSE corporate governance listing
standards. During the year, in accordance with Section 407 of the Sarbanes-Oxley
Act, the Company determined Mr. Azria to be a "Financial Expert". The duties of
the Audit Committee are to: (a) recommend for nomination by the Board of
Directors the independent certified
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public accountants who shall conduct the annual audit of the Company; (b) assist
the Board of Directors in fulfilling its fiduciary responsibilities relating to
corporate accounting and reporting practices through review of accounting
principles, policies, and changes thereto, financial statements, and general
financial disclosure procedures; (c) maintain, through periodic meetings, a
direct line of communication with the independent accountants to provide for
exchanges of views and information; and (d) review management's evaluation of
the adequacy of the Company's internal control structure and the extent to which
major recommendations made by the independent accountants have been implemented.
The number of meetings held during the year is set forth in the "Report of the
Audit Committee," included in this Proxy Statement. The Audit Committee is
governed by a written charter approved by the Board of Directors, a copy of
which is set forth as Annex B to this Proxy Statement. The Charter is reviewed
and reassessed by the Audit Committee and approved by the Board of Directors as
needed but at least annually.
Section 301 of the Sarbanes-Oxley Act requires the Audit Committee to
establish procedures for the receipt, retention and treatment of complaints
received by the Company from its employees regarding perceived questionable
accounting or auditing matters. The Company uses an independent third party to
provide an 800 number for the receipt, recording and transcription of any
complaints received.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting
process on behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process including
the systems of internal controls. In fulfilling its oversight responsibilities,
the Audit Committee reviewed the audited financial statements in the Annual
Report with management including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant
judgments, and the clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of the Company's audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Committee under generally accepted auditing standards, including
Statement on Auditing Standards No. 61 (as amended by Statement on Auditing
Standards No. 90). In addition, the Audit Committee has discussed with the
independent auditors the auditors' independence from management and the Company,
including the matters in the written disclosures required by the Independence
Standards Board, and considered the compatibility of tax services and
audit-related services with the auditors' independence.
The Audit Committee discussed with the Company's independent auditors
the overall scope and plans for their respective audits. The Audit Committee
meets with the independent auditors, with and without management present, to
discuss the results of their examination, and the overall quality of the
Company's financial reporting and internal controls. The Audit Committee held
five meetings during 2003.
In reliance on the reviews and discussions referred to above, the Audit
Committee reviewed and, together with the other members of the Board, approved
for filing with the SEC the Annual Report on Form 10-K for the year ended
December 31, 2003, which includes audited financial statements for such year.
The Audit Committee and the Board of Directors have also recommended the
selection of the
8
Company's independent auditors for 2004.
Respectfully submitted. Audit Committee
Rene-Pierre Azria, Chairman
Lynda W. Popwell
Robert L. Wood
COMPENSATION OF DIRECTORS
Directors who are also employees of the Company receive no additional
compensation for their service on the Board or on any Board committee. In 2003,
non-employee directors received a flat retainer of $22,500 per year, payable
quarterly. This retainer was increased to $26,000 for 2004. In 2003, the
chairman of each of the Audit and Compensation Committees received $5,000 and
the chairman of the Nominating and Policies Committee received $2,500. In 2004,
the chairman for each of these three committees receives $5,000. No additional
fees are paid for meeting attendance. In 2004, each member of any Board
committee, who is not also the chairman, receives $1,000 per year.
On May 8, 2003, each of the then non-employee directors of the Company
was granted options to purchase 6,000 shares of Common Stock under the 2003
Stock Incentive Plan. The exercise price for each share of Common Stock subject
to the option granted to each such director is equal to the fair market value of
a share of Common Stock on the date such option was granted. The foregoing
options expire ten years after the date they are granted. In 2004, the Company
intends to grant each of the non-employee directors options to purchase 7,500
shares of Common Stock under the 2003 Stock Incentive Plan.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
No director, executive officer, or person nominated to become a
director or executive officer has within the last five years: (i) had a
bankruptcy petition filed by or against, or a receiver, fiscal agent or similar
officer appointed by a court for, any business or property of such person or
entity with respect to which such person was a general partner or executive
officer either at the time of the bankruptcy or within two years prior to that
time; (ii) been convicted in a criminal proceeding or is currently subject to a
pending criminal proceeding (excluding traffic violations or similar
misdemeanors); (iii) been subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his or her involvement in any type of business, securities or
banking activities or practice; (iv) been found by a court of competent
jurisdiction (in a civil action), the SEC or the Commodity Futures Trading
Commission to have violated a federal or state securities or commodities law,
and the judgment has not been reversed, suspended or vacated.
THE COMPANY IS NOT AWARE OF ANY MATERIAL PROCEEDINGS TO WHICH ANY DIRECTOR,
EXECUTIVE OFFICER OR AFFILIATE OF THE COMPANY, OR ANY SECURITY HOLDER, INCLUDING
ANY OWNER OF RECORD OR BENEFICIALLY OF MORE THAN 5% OF ANY CLASS OF THE
COMPANY'S VOTING SECURITIES, IS A PARTY ADVERSE TO THE COMPANY OR HAS A MATERIAL
INTEREST ADVERSE TO THE COMPANY.
9
PROPOSAL 1
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation of the Company, as amended,
provides that the maximum number of directors shall be nine and the minimum
number shall be two. The Bylaws of the Company provides that the number of
members constituting the entire Board of Directors is nine. There are currently
eight members of the Board of Directors. The Board of Directors of the Company
is divided into three classes of directors having staggered three-year terms of
office. At each annual meeting of Stockholders, the successor of each director
whose term expires at that annual meeting is elected to hold office for a term
expiring at the annual meeting of Stockholders held in the third year following
the year of his or her election, or until his or her successor have been elected
and qualified in accordance with the Company's Restated Certificate of
Incorporation, as amended, and Bylaws. Pursuant to the Restated Certificate of
Incorporation, as amended, in general, any vacancies on our Board of Directors
resulting from death, resignation, disqualification, removal or other cause may
be filled by an affirmative vote of a majority of the remaining directors then
in office.
The terms of office of the Class II Directors, including Richard L.
Molen, Lynda W. Popwell, and Ian G.H. Ashken, expire at this meeting and each of
Messrs. Molen and Ashken is nominated for reelection. Ms. Popwell has decided to
retire from her Board position and therefore not to stand for reelection.
Accordingly, there will be a vacancy on the Board of Directors which the Board
intends to fill in the upcoming year in accordance with the Restated Certificate
of Incorporation, as amended. The terms of office of the Class III Directors,
including Douglas W. Huemme, Irwin D. Simon, and Robert L. Wood, expire at the
2005 annual meeting. The terms of office of the Class I Directors, including
Martin E. Franklin and Rene-Pierre Azria, expire at the 2006 annual meeting.
There are no family relationships among any of the directors or executive
officers of the Company.
Unless otherwise specified, each proxy received will be voted for the
election as directors of the two nominees named below to serve until the 2007
annual meeting of Stockholders or until their successors shall have been duly
elected and qualified. Each of the nominees has consented to be named a nominee
in the Proxy Statement and to serve as a director if elected. Should any nominee
become unable or unwilling to accept a nomination or election, the persons named
in the enclosed proxy will vote for the election of a nominee designated by the
Board of Directors or will vote for such lesser number of directors as may be
prescribed by the Board of Directors in accordance with the Bylaws of the
Company.
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THE FOLLOWING PERSONS HAVE BEEN NOMINATED AS CLASS II DIRECTORS:
Director
Name Age Since Business Experience
- ---- --- ----- -------------------
Ian G.H. Ashken 43 2001 Mr. Ashken is our Vice Chairman, Chief Financial Officer and Secretary. Mr.
Ashken was appointed to our Board of Directors on June 25, 2001 and became
Vice Chairman, Chief Financial Officer and Secretary effective September
24, 2001. Mr. Ashken is also a principal and executive officer of a number
of private entities. Mr. Ashken was the Vice Chairman of the Board of
Directors of Bolle Inc. from December 1998 until February 2000. From
February 1997 until his appointment as Vice Chairman, Mr. Ashken was the
Chief Financial Officer and a director of Bolle Inc. Mr. Ashken previously
held positions as Chief Financial Officer and a director of Lumen
Technologies, Inc. from May 1996 to December 1998 and Benson Eyecare
Corporation from October 1992 to May 1996.
Richard L. Molen 63 1993 Mr. Molen was Chairman, President and Chief Executive Officer of Huffy
Corporation, a sporting goods company, from September 1994 until his
retirement in December 1997. Mr. Molen served as President and Chief
Executive Officer of Huffy Corporation since April 1993, and has served on
its Board of Directors since June 1984. Mr. Molen also serves as a director
of Huntington Bank and Concrete Technology, Inc.
THE BOARD RECOMMENDS THAT STOCKHOLDER VOTE "FOR" EACH OF THE PERSONS
NOMINATED BY THE BOARD TO SERVE AS CLASS II DIRECTORS.
11
THE TERMS OF THE FOLLOWING CLASS III DIRECTORS EXPIRE AT THE 2005 ANNUAL
MEETING:
Director
Name Age Since Business Experience
- ---- --- ----- -------------------
Douglas W. Huemme 62 1999 Mr. Huemme was Chairman and Chief Executive Officer of Lilly Industries,
Inc., an industrial coating and specialty chemical company, from 1990 until
his retirement in December 2000. He also served as President of Lilly
Industries, Inc. from 1990 until April 1999.
Robert L. Wood 49 2000 Mr. Wood joined Crompton Corporation, a global producer and marketer of
polymer products and specialty chemicals, as President and Chief Executive
Officer in January 2004. From 1977 to January 2004, Mr. Wood worked for The
Dow Chemical Company, serving from November 2000 until January 2004 as
Business Group President for Thermosets and Dow Automotive. From May 1997
until November 2000 he served as Business Vice President for Polyurethanes.
From October 1995 until May 1997 he acted as Business Vice President for
Engineering Plastics.
Irwin D. Simon 45 2002 Mr. Simon is the Chairman, Chief Executive Officer and President of Hain
Celestial Group, Inc., a marketer and distributor of natural, organic and
specialty food products and a NASDAQ company ("Hain"). Mr. Simon was
appointed Chief Executive Officer and President of Hain in May 1993 and
subsequently appointed Chairman of the Board of Directors of Hain in April
2000. From December 1990 through December 1992, Mr. Simon was employed in
various marketing capacities with Slim-Fast Foods Company ("Slim Fast"), a
national marketer of meal replacement and weight loss food supplements. Mr.
Simon also serves as a director of Technology Flavors & Fragrances, Inc.
and other privately held companies.
12
THE TERMS OF THE FOLLOWING CLASS I DIRECTORS EXPIRE AT THE 2006 ANNUAL MEETING:
Director
Name Age Since Business Experience
- ---- --- ----- -------------------
Martin E. Franklin 39 2001 Mr. Franklin is our Chairman and Chief Executive Officer. Mr. Franklin was
appointed to our Board of Directors on June 25, 2001 and became Chairman
and Chief Executive Officer effective September 24, 2001. Mr. Franklin is
also a principal and executive officer of a number of private entities. Mr.
Franklin was the Chairman of the Board of Directors of Bolle Inc. from
February 1997 until February 2000. Mr. Franklin has previously held
positions as Chairman and Chief Executive Officer of Lumen Technologies,
Inc. from May 1996 to December 1998, and Benson Eyecare Corporation from
October 1992 to May 1996. Since January 2002, Mr. Franklin has served as
the Chairman of the Board and a director of Find/SVP, Inc., a Nasdaq OTC
Bulletin Board company. Since March 2003, Mr. Franklin has served as a
director of Bally Total Fitness Holding Corporation, a New York Stock
Exchange company. Since March 2004, Mr. Franklin has also served as a
director of Apollo Investment Corporation, a Nasdaq company.
Rene-Pierre Azria 47 2002 Mr. Azria is a Managing Director of Rothschild, Inc., an investment bank,
and has over twenty years of corporate finance experience, working
generally on large size transactions with a high degree of complexity. His
industry experience is concentrated in technology, media and
telecommunications, and also includes healthcare and consumer goods. Prior
to joining Rothschild, Inc. in 1996, Mr. Azria served as Managing Director
of Blackstone Indosuez and President of Financiere Indosuez in New York.
Mr. Azria also serves as a director of two privately held companies.
13
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age and position of each of
our executive officers as of March 31, 2004. The executive officers of the
Company are appointed by and serve at the discretion of the Board of Directors
of the Company.
NAME AGE POSITION
- ---- --- --------
Martin E. Franklin 39 Chairman and Chief Executive Officer
Ian G.H. Ashken 43 Vice Chairman, Chief Financial Officer, and Secretary
James E. Lillie 42 President and Chief Operating Officer
Desiree DeStefano 36 Senior Vice President
J. David Tolbert 43 Vice President, Human Resources and Administration
See the table of nominees for election as directors for biographical
data with respect to Martin E. Franklin and Ian G.H. Ashken.
JAMES E. LILLIE. Mr. Lillie is our President and Chief Operating
Officer. Mr. Lillie joined the Company in August 2003 as Chief Operating Officer
and assumed the additional title and responsibility of President effective
January 2004. From 2000 to 2003, Mr. Lillie served as Executive Vice President
of Operations at Moore Corporation, Limited, a diversified commercial printing
and business communications company. From 1999 to 2000, Mr. Lillie served as
Executive Vice President of Operations at Walter Industries, Inc., a Kohlberg,
Kravis, Roberts & Company ("KKR") Portfolio Company. From 1990 to 1999, Mr.
Lillie held a succession of managerial human resources, manufacturing, finance
and operations positions at World Color, Inc., another KKR portfolio company.
DESIREE DESTEFANO. Ms. DeStefano serves as our Senior Vice President,
working in the areas of finance, treasury, compliance and acquisitions. Ms.
DeStefano joined our company as Chief Transition Officer and Vice President in
2001. From 2000 to 2001, Ms. DeStefano served as Chief Financial Officer of
Sports Capital Partners, a private equity investment fund. Ms. DeStefano served
as Vice President of Bolle, Inc. from 1998 to 2000. From 1996 to 1998, Ms.
DeStefano was Vice President of Lumen Technologies, Inc. and prior thereto, Ms.
DeStefano held similar positions at Benson Eyecare Corporation.
J. DAVID TOLBERT. Mr. Tolbert is our Vice President, Human Resources
and Administration. From April 1997 to October 1998, Mr. Tolbert served as our
Vice President, Human Resources and Corporate Risk. From October 1993 to April
1997, Mr. Tolbert served as our Director of Human Resources. Since joining Ball
Corporation in 1987, Mr. Tolbert served in various human resource and operating
positions of Ball Corporation.
14
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth information
concerning the annual and long-term compensation earned by the Company's chief
executive officer and four other executive officers of the Company whose annual
salary and bonus during fiscal 2003 exceeded $100,000 (collectively, the "Named
Executive Officers").
LONG-TERM COMPENSATION
----------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------------------------------------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING LTIP ALL OTHER
AWARD(S)($) OPTIONS/ PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) (2) SARS(#) ($)(3) ($)(4)
- ----------------------------------------------------------------------------------------------------------------------------
Martin E. Franklin(5) 2003 648,931 1,273,931 8,706,000 -- -- 26,637
Chairman and Chief Executive 2002 460,769 1,460,769 772,500 750,000 -- 38,704
Officer 2001 50,000 -- -- 900,000 -- --
Ian G.H. Ashken(6) 2003 375,974 813,974 3,177,000 -- -- 19,526
Vice Chairman, Chief Financial 2002 281,538 818,538 309,000 225,000 -- 27,961
Officer and Secretary 2001 50,000 -- -- 450,000 -- --
James E. Lillie(7) 2003 144,231 144,231 997,500 150,000 -- 12,823
President and Chief Operating 2002 -- -- -- -- -- --
Officer
2001 -- -- -- -- -- --
Desiree DeStefano(8) 2003 140,385 210,000 -- 7,500 -- 9,908
Senior Vice President 2002 113,750 200,000 -- 75,000 -- 6,957
2001 14,423 -- -- -- -- --
J. David Tolbert(9) 2003 163,615 81,808 -- 4,500 -- 11,442
Vice President, Human Resources 2002 149,815 72,286 -- 45,000 152,021 50,332
and Administration 2001 140,384 -- -- 22,500 -- 10,365
(1) The amounts shown in the Bonus column include operating bonuses and
discretionary performance based bonuses. Such amounts in 2002 also
included transaction bonuses paid to Mr. Franklin, Mr. Ashken and Ms.
DeStefano following the acquisition of the business of Tilia
International, Inc. The Company has subsequently discontinued its policy
of paying transaction bonuses to its Named Executive Officers.
(2) The amounts shown in the Restricted Stock Award(s) column for 2002
represent the value of restricted stock awarded to certain of the Named
Executive Officers pursuant to the 1998 Long-Term Equity Incentive Plan in
2002. The value was based upon the $5.15 per share fair market value of
our Common Stock on the date of the award. Pursuant to their respective
restricted stock award agreements, as amended, the 150,000 and 60,000
shares of restricted stock awarded to Messrs. Franklin and Ashken, in
2002, respectively, have vested.
The amounts shown in the Restricted Stock Award(s) column for 2003
represent the value of restricted stock awarded to certain of the Named
Executive Officers pursuant to the 2003 Stock Incentive Plan. On May 8,
2003, Messrs. Franklin and Ashken received awards of 225,000 shares and
75,000 shares of restricted stock, respectively, valued at $20.36 per
15
share, in each case based upon the fair market value of the Company's
common stock on the date of the award. On August 8, 2003, Mr. Lillie
received an award of 52,500 shares of restricted stock valued at $19.00
per share, based upon the fair market value of the Company's common stock
on the date of the award. On November 23, 2003, Messrs. Franklin and
Ashken received awards of 150,000 shares and 60,000 shares of restricted
stock, respectively, valued at $27.50 per share, in each case based upon
the fair market value of the Company's common stock on the date of the
award. Pursuant to their respective restrictive stock award agreements, as
amended, all shares of restricted stock awarded to Messrs. Franklin,
Ashken and Lillie have vested.
(3) In connection with the termination of the Company's 1998 Performance Share
Plan in 2003, all outstanding payouts under such plan were made.
Accordingly, on July 25, 2002, Mr. Tolbert received a payout of 11,664
shares under the 1998 Performance Share Plan having a fair market value of
$13.03 per share.
(4) The amounts shown in the All Other Compensation column for 2003 are
comprised as follows:
Mr. Franklin - Company-provided life insurance and long-term disability
premiums, $2,234; imputed taxable income on an individual life insurance
policy, $11,403; the Company's match and additional contribution on the
employee's 401(k) contribution, $12,000; and imputed income on
Company-provided tax services, $1,000.
Mr. Ashken - Company-provided life insurance and long-term disability
premiums, $2,234; imputed taxable income on individual life and disability
policies, $5,292; and the Company's match and additional contribution on
the employee's 401(k) contribution, $12,000.
Mr. Lillie -- Company-provided life insurance and long-term disability
premiums, $859; imputed taxable income on an individual life policy,
$3,310; and the Company's match and additional contribution on the
employee's 401(k) contribution, $8,654.
Ms. DeStefano - Company-provided life insurance and long-term disability
premiums, $1,485; and the Company's match and additional contribution on
the employee's 401(k) contribution, $8,423.
Mr. Tolbert-- Company-provided life insurance and long-term disability
premiums, $1,605; and the Company's match and additional contribution on
the employee's 401(k) contribution, $9,817.
(5) Mr. Franklin was appointed Chairman and Chief Executive Officer in
September 2001. Effective January 1, 2002, the Company entered into an
employment agreement with Mr. Franklin. This agreement was amended and
restated effective October 1, 2003. See "Employment Agreements," below.
(6) Mr. Ashken was appointed Vice Chairman, Chief Financial Officer and
Secretary in September 2001. Effective January 1, 2002, the Company
entered into an employment agreement with Mr. Ashken. This agreement was
amended and restated effective October 1, 2003. See "Employment
Agreements," below.
(7) Mr. Lillie joined the Company as Chief Operating Officer in August 2003
and assumed the additional title and responsibilities of President
effective January 2004. The Company entered into an employment agreement
with Mr. Lillie effective August 4, 2003. See "Employment Agreements,"
below.
(8) Ms. DeStefano joined the Company in November 2001 and was appointed Senior
Vice President of the Company in February 2003.
(9) Mr. Tolbert joined the Company May 1987 and was appointed Vice President,
Human Resources and Administration in October 1998. The Company's
employment agreement with Mr. Tolbert, dated as of January 1, 2002, was
renewed for one year in January 1, 2004 and is subject to an annual
renewal provision. See "Employment Agreements," below.
16
OPTIONS GRANTED IN 2003
POTENTIAL REALIZABLE VALUE
AT ASSUMED RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (1)
----------------------------------------------------------------------------------------------------
PERCENTAGE
NUMBER OF OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
UNEXERCISED EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE PER EXPIRATION
NAME GRANTED 2003 SHARE ($) DATE 5% ($) 10% ($)
-----------------------------------------------------------------------------------------------------------------------------------
Martin E. Franklin -- -- -- -- -- --
Ian G.H. Ashken -- -- -- -- -- --
James E. Lillie 150,000 31.7% 19.00 8/8/13 1,792,350 4,542,166
Desiree DeStefano 7,500 1.6% 19.20 7/28/13 90,561 229,499
J. David Tolbert 4,500 1.0% 19.20 7/28/13 54,336 137,699
- -------------
(1) The dollar amounts under these columns are the result of calculation at
the 5% and 10% rates set by the SEC and therefore are not intended to
forecast possible future appreciation, if any, in the market value of our
Common Stock.
AGGREGATE OPTION EXERCISES IN 2003 AND 2003 YEAR END OPTION VALUES
The following table contains certain information regarding options to
purchase Common Stock held as of December 31, 2003, by each of the Named
Executive Officers. The stock options listed below were granted without tandem
stock appreciation rights and without freestanding stock appreciation rights
outstanding.
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS AT DECEMBER 31,
OPTIONS AT 12/31/03 2003 ($) (1)
-----------------------------------------------------------
SHARES
ACQUIRED ON VALUE NON- NON-
NAME EXERCISE REALIZED ($) EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
----------------------------------------------------------------------------------------------------------------
Martin E. Franklin -- -- 187,501 562,499 2,707,514 8,122,486
Ian G.H. Ashken -- -- 56,251 168,749 812,264 2,436,736
James E. Lillie -- -- -- 150,000 -- 1,251,000
Desiree DeStefano -- -- 18,750 63,750 320,625 1,022,925
J. David Tolbert 27,000 349,943 32,625 66,375 650,059 1,187,336
- -------------
(1) Before taxes. The dollar value reported is based on the difference
between the exercise price of the option outstanding and the market
price of Common Stock at the close of trading on December 31, 2003. The
closing market price on that date was $27.34 per share.
17
REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION COMMITTEE
Introduction
The Company's Compensation Committee (the "Committee") consists of
three directors, all of whom have considerable experience in executive
compensation issues and management development. No member of the Committee has
ever been an officer or employee of the Company, nor is there a direct or
indirect relationship between any of the members of the Committee and any of the
Company's executive officers.
The Company entered into amended and restated employment agreements,
effective October 1, 2003, with each of Messrs. Franklin and Ashken and entered
into an employment agreement with Mr. Lillie as of August 4, 2003. See
"Employment Agreements," below.
In 2003, the Board of Directors of the Company maintained the 2003
Stock Incentive Plan to incentivize executive officers and other key employees.
See "2003 Stock Incentive Plan," below.
The Committee annually determines compensation of the Company's senior
management and its executive officers. The Committee also oversees the
administration of executive programs and has approved a compensation philosophy
for the Company, which is described below.
Executive Compensation Philosophy
The basic elements of the Company's compensation philosophy are to
provide competitive annual compensation combined with long-term reward
opportunities and risks by linking management's compensation to the Company's
success in creating value for its Stockholders. The total compensation package,
which includes base salary, incentive compensation and long-term incentive
opportunities in the form of grants under the Company's stock incentive plans,
is designed to allow the Company to attract, motivate, and retain top-quality
executives.
Cash Compensation
For 2003, base salaries and target incentive compensation participation
rates (percentage of base salary) for the Company's executive officers were
established by the Committee. Base salary and incentive compensation (total cash
compensation) earned in 2003 by the Named Executive Officers are reflected in
the "Salary" and "Bonus" columns in the Summary Compensation Table.
2003 Stock Incentive Plan
The 2003 Stock Incentive Plan, is designed to give the Board discretion
and flexibility in designing incentive compensation packages to motivate
executive officers and key employees to improve the operations of the Company,
thereby maximizing Stockholder value. Pursuant to this plan, the Board may issue
to employees, officers, directors, consultants, independent contractors and
advisors of the Company and its subsidiaries incentive stock options,
nonqualified stock options, restricted stock and stock bonuses. The specific
types and size of awards to be granted (other than options granted to non-
18
employee directors) and the terms and conditions of such awards are determined
by the Committee subject to the provisions of the 2003 Stock Incentive Plan.
The Committee has set guidelines which determine the number of shares
to be granted and the frequency of stock option awards. These guidelines, which
are applicable to all participants including the Chief Executive Officer,
provide that awards will generally be based upon the employee's position within
the Company and a subjective review of the employee's performance. The stock
option awards to each individual are not conditioned on the number of previously
granted options. All awards to executive officers are within the discretion of
the Committee. The Committee believes that the total compensation package has
been designed to motivate executive officers to improve the operations of the
Company, thereby increasing the market value of our Common Stock. The foregoing
tables reflect the compensation structure being pursued by the Committee.
Compensation for the Chief Executive Officer
Mr. Franklin is compensated pursuant to an employment agreement. From
January 1, through February 14, 2003, Mr. Franklin's annual base salary was
$511,000, and from February 15 through September 30, 2003, his annual base
salary was $611,000. On October 1, 2003, Mr. Franklin entered into an amended
and restated employment agreement with the Company pursuant to which his annual
base salary increased to $850,000 effective as of that date. See "--Employment
Agreements," below. Mr. Franklin is eligible for an operating bonus of between
50% and 100% of base salary based upon the Company achieving its earnings
objectives and a discretionary performance bonus of up to 100% of base salary at
the discretion of the Board or Compensation Committee. See "--Employment
Agreements," below. In addition, Mr. Franklin is eligible for awards under the
2003 Stock Incentive Plan in accordance with the guidelines set forth in this
Report of the Compensation Committee. On May 8, 2003, Mr. Franklin was awarded
225,000 shares of restricted stock under the 2003 Stock Incentive Plan, which
shares have vested. On November 23, 2003, Mr. Franklin was granted 150,000
shares of restricted stock, which shares have vested, in lieu of a grant of
150,000 shares of restricted stock on January 1, 2004 to which he was entitled
to pursuant to his amended and restated employment agreement.
Respectfully submitted. Compensation Committee
Richard L. Molen, Chairman
Irwin D. Simon
Robert L. Wood
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee during 2003 was an officer,
employee or former officer of the Company of any of its subsidiaries or had any
relationship requiring disclosure herein pursuant to SEC regulations. No
executive officer of the Company served as a member of a compensation committee
or a director of another entity under circumstances requiring disclosure under
SEC regulations.
19
PERFORMANCE GRAPH
The graph below compares the cumulative total Stockholder return on the
Company's Common Stock from December 31, 1998 through December 31, 2003, with
the cumulative total return of (a) the Dow Jones Consumer Index - Non-Cyclical
and (b) the Russell 2000 Index. The graph assumes that the beginning value of
the Common Stock and each index was $100. The comparisons in the graph below are
based on historical data and are not indicative of, or intended to forecast,
possible future performance of Common Stock.
JARDEN INDEXED STOCK PERFORMANCE
[GRAPHIC OMITTED]
December 31, December 31, December 31, December 31, December 31, December 31,
1998 1999 2000 2001 2002 2003
---------------------------------------------------------------------------------------------
Jarden 100.0 92.3 56.3 65.4 198.9 341.8
D.J. Consumer - 100.0 99.4 87.6 88.6 83.0 98.7
Non-Cyclical
Russell 2000 100.0 119.6 114.6 115.8 90.8 132.0
20
EMPLOYMENT AGREEMENTS
The Company's amended and restated employment agreement with Martin E.
Franklin, dated as of October 1, 2003, is for a term of four years, subject to
certain termination rights and renewal provisions. Mr. Franklin currently
receives an annual base salary of $850,000 (which increases each year up to a
maximum of $1,100,000 in the final year of the agreement), as well as an
operating bonus of up to 50% of base compensation each year for achieving the
Company's earnings per share budget and up to 100% of base compensation each
year for achieving 110% of the Company's earnings per share budget in each case
based on the annual budget approved by the Board. In addition, Mr. Franklin is
eligible for a discretionary performance-based bonus of up to 100% of base
compensation each year, at the discretion of the Board or Compensation
Committee. Mr. Franklin's employment agreement also entitles him to participate
in the medical, insurance and other fringe benefit plans or policies the Company
may make available to, or have in effect for, its personnel with commensurate
duties from time to time. Mr. Franklin's employment agreement also provides for
certain other ancillary benefits. In connection with this agreement, as amended,
Mr. Franklin was granted 150,000 shares of restricted stock on November 23,
2003, which shares have vested. In addition, the agreement provides for
restricted stock grants on January 1 of each of the next three years and also
requires the Company to provide Mr. Franklin with $10 million of life insurance.
Mr. Franklin's employment agreement also contains a noncompetition covenant and
nonsolicitation provisions (relating to the Company's employees and customers)
effective during the term of his employment and during the greater of (i) a
period of three years after any termination of Mr. Franklin's employment or (ii)
any period thereafter during which Mr. Franklin continues to receive benefits
under the employment agreement, other than in cases of a termination by the
Company without good cause, by Mr. Franklin with good reason or if Mr.
Franklin's employment is not renewed. In the event Mr. Franklin's employment is
terminated by the Company without "cause" (as such term is defined in his
employment agreement) or upon "disability" (as such term is defined in his
employment agreement), Mr. Franklin will be entitled to (a) three times (two
times in the case of termination due to death) base compensation, (b) three
times (two times in the case of termination due to death) the average annual
bonus paid over the preceding two fiscal years, (c) except in the case of
non-renewal of employment, the accrued annual bonus through the date of
termination, (d) the continuation of health insurance and other benefits for
three years (two years in the case of termination due to death) at the Company's
expense, (e) full vesting of any outstanding stock options on the Company's
stock, and (f) the lapsing of any restrictions over any restricted shares of the
Company's stock. In addition, Mr. Franklin's employment agreement may be
terminated at the Company's option for "cause" (as such term is defined in his
employment agreement).
The Company's amended and restated employment agreement with Ian G.H.
Ashken, dated as of October 1, 2003, is for a term of four years, subject to
certain termination rights and renewal provisions. Mr. Ashken currently receives
an annual base salary of $450,000 (which increases each year up to a maximum of
$585,000 in the final year of the agreement), as well as an operating bonus of
up to 50% of base compensation each year for achieving the Company's earnings
per share budget and up to 100% of base compensation each year for achieving
110% of the Company's earnings per share budget in each case based on the annual
budget approved by the Board. In addition, Mr. Ashken is eligible for a
discretionary performance-based bonus of up to 100% of base compensation each
year, at the discretion of the Board or Compensation Committee. Mr. Ashken's
employment agreement also entitles him to participate in the medical, insurance
and other fringe benefit plans or policies the Company may make available to, or
have in effect for, its personnel with commensurate duties from time to time.
Mr.
21
Ashken's employment agreement also provides for certain other ancillary
benefits. In connection with this agreement, as amended, Mr. Ashken was granted
60,000 shares of restricted stock on November 23, 2003, which shares have
vested. In addition, the agreement provides for restricted stock grants on
January 1 of each of the next three years and also requires the Company to
provide Mr. Ashken with $6 million of life insurance. Mr. Ashken's employment
agreement also contains a noncompetition covenant and nonsolicitation provisions
(relating to the Company's employees and customers) effective during the term of
his employment and during the greater of (i) a period of three years after any
termination of Mr. Ashken's employment or (ii) any period thereafter during
which Mr. Ashken continues to receive benefits under the employment agreement,
other than in cases of a termination by the Company without good cause, by Mr.
Ashken with good reason or if Mr. Ashken's employment is not renewed. In the
event Mr. Ashken's employment is terminated by the Company without "cause" (as
such term is defined in his employment agreement) or upon "disability" (as such
term is defined in his employment agreement), Mr. Ashken will be entitled to (a)
three times (two times in the case of termination due to death) base
compensation, (b) three times (two times in the case of termination due to
death) the average annual bonus paid over the preceding two fiscal years, (c)
except in the case of non-renewal of employment, the accrued annual bonus
through the date of termination, (d) the continuation of health insurance and
other benefits for three years (two years in the case of termination due to
death) at the Company's expense, (e) full vesting of any outstanding stock
options on the Company's stock, and (f) the lapsing of any restrictions over any
restricted shares of the Company's stock. In addition, Mr. Ashken's employment
agreement may be terminated at the Company's option for "cause" (as such term is
defined in his employment agreement).
The Company's employment agreement with James E. Lillie, dated as of
August 4, 2003, is an initial two-year term subject to successive one-year
renewal terms, such renewal terms to be automatic unless either party gives
prior written notice of non-renewal. Mr. Lillie currently receives a base salary
of $400,000 per year, subject to an annual increase at least equal to the change
in the Consumer Price Index, plus a performance-based bonus package. Mr. Lillie
also received 52,500 shares of restricted common stock on August 8, 2003, as
well as 150,000 stock options with the option price being the closing price of
our common stock on such date. Mr. Lillie will receive a prescribed severance
pay amount if he is terminated without cause or suffers a specified disability.
Mr. Lillie's employment agreement also entitles him to participate in the
medical, insurance and other fringe benefit plans or policies the Company may
make available to, or have in effect for, its personnel with commensurate duties
from time to time. Mr. Lillie's employment agreement contains a noncompetition
covenant and nonsolicitation provisions (relating to the Company's employees and
customers) effective during the term of his employment and continuing for a
period of 18 months after the expiration or termination of Mr. Lillie's
employment. In the event Mr. Lillie's employment is terminated by the Company
without "cause" (as such term is described in his employment agreement) or upon
"disability" (as such term is defined in his employment agreement), Mr. Lillie
will be entitled to (a) eighteen months base compensation, (b) eighteen months
target bonus that he would have been entitled to receive for achieving budget
for the year in which his employment was terminated, (c) the continuation of
health insurance and other benefits for eighteen months at the Company's
expense, (d) full vesting of any outstanding stock options on the Company's
stock, and (e) the lapsing of any restrictions over any restricted shares of the
Company's stock owned by Mr. Lillie. In addition, Mr. Lillie's employment
agreement may be terminated at the Company's option for "cause."
The Company's employment agreement with J. David Tolbert, dated as of
January 1, 2002, was renewed for one year on January 1, 2004 and is subject to
an annual renewal provision. Under the
22
employment agreement, Mr. Tolbert currently receives an annual base salary of
$175,000, as well as a discretionary bonus package based on the Company's
performance. Mr. Tolbert's employment agreement also entitles him to participate
in the medical, insurance and other fringe benefit plans or policies the Company
may make available to, or have in effect for, its personnel with commensurate
duties from time to time. Mr. Tolbert's employment agreement contains a
noncompetition covenant and nonsolicitation provisions (relating to the
Company's employees and customers) effective during the term of his employment
and continuing for a period of 12 months after the expiration or termination of
Mr. Tolbert's employment. In the event Mr. Tolbert's employment is terminated by
the Company without "cause" (as such term is described in his employment
agreement) or upon "disability" (as such term is defined in his employment
agreement), Mr. Tolbert will be entitled to (a) one year's base compensation,
(b) one year's target bonus that he would have been entitled to receive for
achieving budget for the year in which his employment was terminated, (c) the
continuation of health insurance and other benefits for one year at the
Company's expense, (d) full vesting of any outstanding stock options on the
Company's stock, and (e) the lapsing of any restrictions over any restricted
shares of the Company's stock owned by Mr. Tolbert. In addition, Mr. Tolbert's
employment agreement may be terminated at the Company's option for "cause."
23
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Executive Loan Program
Section 402 of the Sarbanes-Oxley Act provides that companies may not
make loans to its executive officers and directors. Prior to the enactment of
the Sarbanes-Oxley Act, the Company operated an executive loan program to
provide loans to finance exercises of incentive stock options and non-qualified
stock options granted under our various stock plans. Pursuant to this program,
on January 24, 2002, Messrs. Franklin and Ashken received interest bearing loans
from the Company in the amount of $3,282,000 and $1,641,000, respectively, in
connection with the exercise of non-qualified stock options to purchase 900,000
and 450,000 shares, respectively, of Common Stock granted under the 2001 Stock
Option Plan. These loans accrued interest at a rate of 4.125% per annum. On
February 14, 2003, Mr. Ashken surrendered 15,000 shares of Common Stock to the
Company to repay approximately $259,500 of the outstanding amount under his
loan. On April 29, 2003, Messrs. Franklin and Ashken each surrendered to the
Company shares of the Company's common stock to repay in full all remaining
principal amounts and accrued interest owed under their respective loans. In
accordance with the Sarbanes-Oxley Act, the Company will not make any additional
loans to its executive officers and directors under the executive loan program.
Agreement with NewRoads, Inc.
On November 6, 2002, one of the Company's wholly owned subsidiaries
entered into an arms length agreement with NewRoads, Inc. ("NewRoads"), a third
party provider of pick, pack and ship services, order fulfillment, warehousing,
and other services to the retail industry. Pursuant to the agreement, NewRoads
agreed to provide such services to the Company's home vacuum packaging segment.
On January 9, 2004, NewRoads delivered written notice of its intent to terminate
the agreement upon the expiration of the applicable 180 day notice period. Mr.
Franklin's brother-in-law was the chairman of the board of NewRoads at the time
of the agreement being consummated. Mr. Franklin has an indirect ownership
interest of less than 1/2% in NewRoads. During fiscal 2003, the Company paid
$2.6 million to NewRoads in connection with these services.
24
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Ernst & Young LLP has audited the financial statements of the Company
for the year ended December 31, 2003. The Board of Directors desires to continue
the services of Ernst & Young LLP for the current year ending December 31, 2004.
Accordingly, the Board of Directors will recommend at the Meeting that the
Stockholders ratify the appointment by the Board of Directors of the firm of
Ernst & Young LLP to audit the financial statements of the Company for the
current year. Representatives of that firm are expected to be available at the
Meeting, shall have the opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions. In the
event the Stockholders do not ratify the appointment of Ernst & Young LLP, the
appointment will be reconsidered by the Audit Committee and the Board of
Directors.
FEES PAID TO ERNST & YOUNG LLP
The following table sets forth the aggregate fees billed by Ernst &
Young LLP for audit services rendered in connection with the consolidated
financial statements and reports for fiscal year 2003 and for other services
rendered during fiscal year 2003 on behalf of the Company and its subsidiaries,
as well as out-of-pocket costs incurred in connection with these services, which
have been billed to the Company.
- ------------------------------------------------------------------------------------------------------------
FEE CATEGORY: FISCAL 2003 % OF TOTAL FISCAL 2002 % OF TOTAL
- ------------ ----------- ---------- ----------- ----------
- ------------------------------------------------------------------------------------------------------------
Audit Fees......................... $1,050,040 45.0 $ 519,900 35.3
- ------------------------------------------------------------------------------------------------------------
Audit-Related Fees................. 728,794 31.3 232,000 15.7
- ------------------------------------------------------------------------------------------------------------
Tax Fees........................... 552,446 23.7 721,550 49.0
- ------------------------------------------------------------------------------------------------------------
All Other Fees..................... 0 0.0 0 0.0
- ------------------------------------------------------------------------------------------------------------
Total Fees......................... $2,331,280 100.0 $1,473,450 100.0
- ------------------------------------------------------------------------------------------------------------
AUDIT FEES: Consists of fees billed for professional services rendered
for the audit of the Company's consolidated financial statements and review of
the interim condensed consolidated financial statements included in quarterly
reports and services that are normally provided by Ernst & Young LLP in
connection with statutory and regulatory filings or engagements, and attest
services, except those not required by statue or regulation.
AUDIT-RELATED FEES: Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company's consolidated financial statements and are not reported under
"Audit Fees". These services include employee benefit plan audits, accounting
consultations in connection with acquisitions, attest services that are not
required by statute or regulation, and consultations concerning financial
accounting and reporting standards.
TAX FEES: Consists of tax compliance/preparation and other tax
services. Tax compliance/preparation consists of fees for professional services
related to federal, state and international tax compliance, assistance with tax
audits and appeals, and assistance related to the impact of mergers,
acquisitions and divestitures on tax return preparation and such amounts were
$447,447 and $721,550 for the years ended December 31, 2003 and 2002,
respectively. Other tax services consist of fees for other
25
miscellaneous tax consulting and planning and such amount was $104,999 for the
year ended December 31, 2003. There were no amounts incurred for other tax
services in the year ended December 31, 2002. For the year ended December 31,
2003, Ernst & Young LLP performed the Company's income tax compliance services.
For the year ending December 31, 2004, the Company has instead engaged KPMG LLP
to perform these services.
ALL OTHER FEES: Consists of fees for all other services other than
those reported above. The Company did not engage Ernst & Young LLP in this
capacity during 2003 or 2002 and its intent is to minimize services in this
category.
In making its recommendation to ratify the appointment of Ernst & Young
LLP as the Company's independent auditors for the fiscal year ending December
31, 2004, the Audit Committee has considered whether services other than audit
and audit-related provided by Ernst & Young LLP are compatible with maintaining
the independence of Ernst & Young LLP.
AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF
INDEPENDENT AUDITORS
The Audit Committee pre-approves all services provided by the
independent auditors. These services may include audit, audit-related, tax,
permissible non-audit and other. The Audit Committee has adopted a policy for
the pre-approval of services provided by the independent auditors. Under the
policy, pre-approval is generally provided for up to one year and any
pre-approval is detailed as to the particular service or category of services
and is subject to specific budget. In addition, the Audit Committee may also
pre-approve particular services on a case-by-case basis and the full Board may
approve fees on behalf of the Audit Committee. For each proposed service, the
independent auditor is required to provide detailed back-up documentation at the
time to at least one of the Audit Committee members. Such member may approve the
service and related fee but must report any decisions to the Audit Committee at
the next scheduled meeting, at which time the approval will be ratified.
26
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to present any other matter for action at the Meeting other than as set
forth in the Notice of Annual Meeting and this Proxy Statement. If any other
matters properly come before the Meeting, it is intended that the shares
represented by the proxies will be voted, in the absence of contrary
instructions, in the discretion of the persons named in the proxy.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers and any
persons who own more than 10% of the Company's capital stock to file with the
SEC (and, if such security is listed on a national securities exchange, with
such exchange), various reports as to ownership of such capital stock. Such
persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely upon reports and representations submitted by the
directors, executive officers and holders of more than 10% of our capital stock,
all Forms 3, 4 and 5 showing ownership of and changes of ownership in our
capital stock during the 2003 year were timely filed with the SEC and the NYSE
with the exception of the following filings being late: Lynda W. Popwell filing
a report in March 2003 amending an earlier report that was timely filed in
February 2003; Martin E. Franklin and Ian G.H. Ashken reporting in December 2003
the award by the Company in November 2003 of restricted shares of stock.
ANNUAL REPORT
A copy of the Company's 2003 Annual Report to Stockholders is being
mailed to Stockholders along with this Proxy Statement. Any Stockholder who has
not received a copy of the 2003 Annual Report to Stockholders and wishes to do
so should contact the Company by mail at the address set forth on the Notice of
Annual Meeting or by telephone at (914) 967-9400.
FORM 10-K
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH STOCKHOLDER AS OF THE
RECORD DATE, ON THE WRITTEN REQUEST OF THE STOCKHOLDER, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2003, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULE, AS FILED WITH THE SEC. STOCKHOLDERS SHOULD
DIRECT THE WRITTEN REQUEST TO JARDEN CORPORATION, 555 THEODORE FREMD AVENUE,
RYE, NEW YORK 10580.
PROPOSALS BY STOCKHOLDERS
The Company's Bylaws prescribe the procedures Stockholders must follow
to nominate directors or to bring other business before Stockholder meetings. To
nominate a candidate for director at the 2005 Annual Meeting, your notice of the
nomination must be received by the principal executive offices of the Company at
555 Theodore Fremd Avenue, Rye, New York 10580 between December 26, 2004 and
January 25, 2005. The notice must describe various matters regarding the
nominee, including, but not limited to, the name, address, occupation and the
number of shares held by such nominee. To bring other
27
matters before the 2004 Annual Meeting and to include a matter in the Company's
proxy statement and proxy for that meeting, notice must be received by the
Company within the time limits described above, meet the requirements of the
Company's Bylaws, and otherwise comply with the requirements of Rule 14a-8 of
the Exchange Act. Copies of the Company's Bylaws may be obtained free of charge
from the Secretary of the Company.
FOR THE BOARD OF DIRECTORS
/s/ Ian G.H. Ashken
-----------------------------------------
Ian G.H. Ashken
Vice Chairman, Chief Financial Officer and Secretary
28
ANNEX A
JARDEN CORPORATION
BOARD OF DIRECTORS
GOVERNANCE PRINCIPLES AND CODE OF CONDUCT
I. Membership
A. Independence
A majority of the Directors shall satisfy the independence
requirements of the SEC and the NYSE. In general,
"independent" means that the Director shall have no material
relationship with the Company or any member of the senior
management of the Company. In performing their duties,
Directors must hold themselves free of any interest, influence
or relationship with respect to any activity which could
impair their judgment or objectivity in the course of their
service to the Company.
B. New Directors
The Nominating and Policies Committee has, as one of its
responsibilities, the recommendation of director candidates to
the full Board.
C. Mandatory Retirement
The mandatory retirement age for independent directors is 70.
A. Stock Ownership
Independent directors with more than one year of service are
urged to directly own at least 1,000 shares of Company common
stock.
II. Code of Conduct
A. General
Directors shall at all times exhibit high standards of
integrity, commitment and independence of thought and
judgment.
B. Representation
Directors shall at all times represent the interest of the
Company's stockholders, striving to enhance and maintain the
reputation of the Company by complying with all of its
policies and by-laws.
C. Conflicts of Interest
Directors are expected to avoid any action, position or
interest that conflicts with the interest of the Company or
gives the appearance of conflict. Accordingly, the Company
should not enter into any paid consulting arrangements with
outside Directors or their employers, without obtaining Board
approval.
D. Share ownership; Purchases and Sales
The Board believes that the number of shares of the Company's
stock owned by each Director is a personal decision, and
encourages stock ownership. Directors may not trade in Jarden
securities while having inside information concerning the
Company, or in the securities of any other company about which
he or she has obtained inside information in his or her role
as Director, until after that information has adequately been
disseminated to the market. Inside information may not be
passed on to others, including family members and friends.
Directors will comply with all reporting requirements of the
Securities and Exchange Commission concerning his/her
purchases and sales of Company securities.
A-1
E. Contact with Employee, Stockholder, Customer or Competitor
In the event of a Director being contacted by an employee,
stockholder, customer or competitor concerning a violation of
law or company policy, the Director must report promptly the
nature of the contact to the Audit Committee or the full Board
to ensure proper documentation and the appropriateness of the
contact. Additionally, the Board of Directors must help to
ensure that such contacting employee will not be disciplined
for merely reporting in good faith a suspected violation of
law or Company policy.
III. Duties and Responsibilities
The responsibility of the Board of Directors is to direct the
management of the Company in the interest, and for the benefit, of the
Company's stockholders. To that end, the Board of Directors shall have
the following duties and responsibilities.
A. Overseeing the conduct of the Company's business to evaluate
whether the business is being properly managed.
B. Reviewing, and where appropriate, approving the Company's
major financial objectives, plans and actions.
C. Reviewing, and where appropriate, approving major changes in,
and determinations of other major issues respecting, the appropriate
auditing and accounting principles and practices to be used in the
preparation of the Company's financial statements.
D. Assessing major risk factors relating to the Company and its
performance, and reviewing measure to address and mitigate such risks.
E. Reviewing and approving a CEO succession plan at least
annually.
F. Hiring advisors to assist it in performing its duties and
responsibilities on behalf of the Company. The Board shall have the
express right to hire its own advisors at its sole discretion without
necessarily obtaining the approval of management.
G. Reviewing and assessing its own performance at least annually.
H. Responding to communications from securities holders.
IV. Meetings
A. Frequency
The Chairman shall determine the agenda, timing and length of
each meeting of the Board. Board members are also entitled to
suggest the inclusion of items on the agenda. The Board
expects that at least four regularly scheduled meetings will
be held during the year. In addition to regularly scheduled
meetings, unscheduled meetings may be called upon appropriate
notice at any time to address specific needs of the Company.
B. Confidentiality
Directors should understand and respect the need for a high
level of confidentiality relating to affairs of the Company.
C. Executive Sessions
The Board shall meet at least once per year in a non-executive
session, without the participation of the Chief Executive
Officer and Chief Financial Officer or other members of
management. The Board shall not take formal actions at such
sessions but may make recommendations to the full Board as a
result of such sessions.
A-2
D. Attendance
Each Board member shall make every reasonable effort to attend
all of the Board meetings and, at the very least, attend a
majority of the meeting held during any fiscal year.
E. Lead Director
The Board shall designate a non-executive lead director to
preside over non-executive sessions and perform any duties
more appropriately performed by an independent director which
would otherwise be performed by the Chairman.
V. Committees
The Board shall maintain an Audit, Compensation and Nominating and
Policies Committee, each of which shall be governed by a separate
charter approved by the Board of Directors.
A-3
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ANNEX B
JARDEN CORPORATION
AUDIT COMMITTEE CHARTER
I. PURPOSE
This charter governs the operations of the audit committee. The charter will be
reviewed and reassessed by the committee and will be approved by the Board of
Directors (the "Board"), at least annually.
II. FUNCTION
The primary function of the Audit Committee is to assist the Board of Directors
in fulfilling its oversight responsibilities to the stockholders, potential
stockholders, the investment community and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the annual independent audit of the
company's financial statements, corporate governance and the legal compliance
and the ethics programs, as established by management and the Board of
Directors. Consistent with this function, the Audit Committee should encourage
continuous improvement of, and should foster adherence to, the corporation's
policies, procedures and practices at all levels. The Audit Committee has the
authority to conduct or authorize investigations into any matters within the
committee's scope of responsibilities. The committee is empowered to retain
independent counsel and other professionals or to consult with the Company's
counsel or professional advisors to assist it in the conduct of any
investigation or to advise it with regard to any of its functions, duties,
responsibilities and processes.
Management is responsible for preparing the Company's financial statements and
the independent auditors are responsible for auditing those financial
statements. While the audit committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the audit committee to plan or
conduct audits to determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. Furthermore, it is not the duty of the audit committee to conduct
investigations, to resolve disagreements (if any) between management and the
independent auditor, or to assure compliance with laws and regulations.
III. COMPOSITION
The Audit Committee shall be comprised of at least three directors as determined
by the Board, each of who are independent of management and the Company. The
members of the Audit Committee shall meet the independence and experience
requirements of the New York Stock Exchange, Section 10A(m)(3) of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the
Commission. Each member of the Audit Committee must be financially literate, as
such qualification is interpreted by the Company's Board in its business
judgment, or must become financially literate within a reasonable period of time
after his or her appointment to the Audit Committee. In addition, at least one
member of the Audit Committee must have accounting or related financial
management expertise, as the Company's Board interprets such qualification in
its business judgment.
B-1
The members of the Committee shall be elected by the Board until their
successors shall be duly elected and qualified. Unless a Chair is elected by the
full Board, the members of the Committee may designate a Chair by majority vote
of the full Committee membership. The Chair shall have accounting or related
financial management expertise.
Audit Committee members shall not simultaneously serve on the audit committees
of more than two other public companies unless the Board determines that such
simultaneous service would not impair the ability of such member to effectively
serve on the Audit Committee.
IV. FREQUENCY OF MEETINGS
The committee shall meet in person or telephonically at least quarterly with
management and the independent auditors and report on such meetings to the
Board. For the meeting to approve the annual report and Form 10-K, all members
shall attend the meeting. For all other meetings, the Chair or the other 2
members together may represent the committee.
V. RESPONSIBILITIES AND PROCESSES
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. Management is responsible for preparing the
Company's consolidated financial statements, and the independent auditors are
responsible for auditing those consolidated financial statements. The Committee
in carrying out its responsibilities believes its policies and procedures should
remain flexible, in order to best react to changing conditions and
circumstances. The Committee should take the appropriate action to set the
overall corporate "tone" for quality financial reporting, sound business risk
practices and ethical behavior.
The Audit Committee shall be directly responsible for the appointment,
compensation, retention, and oversight of the work of any registered public
accounting firm engaged for the purpose of preparing or issuing an audit report
or performing other audit, review or attest services for the Company. The Audit
Committee or Board shall have the sole authority to approve all audit engagement
fees and terms, as well as non-audit engagements with the independent auditors.
The Audit Committee shall be directly responsible for the oversight of the work
of the independent auditor, including resolution of disagreements between
management and the independent auditor.
The Audit Committee shall preapprove all auditing services and permitted
non-audit services to be performed for the Company by its independent auditor,
subject to the de minimis exceptions for non-audit services described in Section
10A(i)(1)(B) of the Exchange Act which are approved by the Audit Committee prior
to the completion of the audit. Either the Chairman of the Audit Committee
acting alone or the other two members acting jointly may grant preapprovals of
audit and permitted non-audit services, provided that decisions of such
subcommittee to grant preapprovals shall be presented to the full Audit
Committee or the Board of Directors at its next scheduled meeting.
The following shall be the principal recurring processes of the audit committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the
B-2
committee may supplement as appropriate.
o The committee shall have a clear understanding with management and
the independent auditors that the independent auditors are
ultimately accountable to the Board and the audit committee, as
representatives of the Company's stockholders. The committee shall
have the ultimate authority and responsibility to evaluate and,
where appropriate, replace the independent auditors.
o The committee shall review and approve the scope of the annual
audit.
o The committee shall review and approve the independent auditor's
audit fees on an annual basis, based upon recommendations from
management.
o The committee shall review all non-audit related work provided by
the company's independent auditors and the fees associated with
such work to ensure that they are reasonable and proper and do not
jeopardize the auditors' independence.
o The committee shall review the interim financial statements and
information with management and the independent auditors prior to
the disclosure of such to the stockholders and the public and
prior to the filing of the Company's Quarterly Report on Form
10-Q. Also, the committee will discuss the results of the
quarterly review and any other matters required to be communicated
to the committee by the independent auditors under generally
accepted auditing standards.
o The committee shall review with management and the independent
auditors the financial statements to be included in the Company's
Annual Report on Form 10-K (or the annual report to stockholders
if distributed prior to the filing of Form 10-K), including their
judgments about the quality, not just acceptability, of accounting
principles, the reasonableness of significant judgments, and the
clarity of the disclosure in the financial statements. Also, the
committee will discuss the results of the annual audit and any
other matters required to be communicated to the committee by the
independent auditors under generally accepted auditing standards.
o The committee shall review and assess any management letter(s)
received from the independent auditors addressing matters relating
to internal controls and procedures. The committee shall ensure
that management addresses any reportable conditions or material
weaknesses.
o The committee shall oversee the Company's policies and procedures
with respect to risk assessment and risk management.
o The committee shall establish procedures for the receipt,
retention and treatment of complaints received by the Company
regarding accounting, internal accounting controls or auditing
matters, and the confidential, anonymous submission by employees
of concerns regarding questionable accounting or auditing matters.
B-3
o The committee shall obtain and review a report from the
independent auditor at least annually regarding:
(a) All critical accounting practices to be used.
(b) All alternative treatments of financial information within
generally accepted accounting principles that have been
discussed with management, ramifications of the use of such
alternative disclosures and treatments, and the treatment
preferred by the independent auditor.
(c) Other material written communications between the
independent auditor and management, such as any management
letter or schedule of unadjusted differences.
(d) The independent auditor's internal quality-control
procedures.
(e) Any material issues raised by the most recent internal
quality-control review, or peer review, of the firm, or by
any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one
or more independent audits carried out by the firm, and any
steps taken to deal with any such issues.
(f) All relationships between the independent auditor and the
Company.
(g) Whether in the course of conducting the audit, the
independent auditor detected or otherwise became of aware of
information indicating that an illegal act (whether or not
perceived to have a material effect on the Company's
financial statements) has or may have occurred.
o The committee shall discuss with, the independent auditors and/or
management:
(a) All critical accounting policies and practices to be used
any significant financial reporting issues.
(b) All alternative treatments of financial information within
generally accepted accounting principles including the
ramifications of the use of such alternative disclosures and
treatments.
(c) The effect of regulatory and accounting initiatives as well
as off-balance sheet structures on the Company's financial
statements.
(d) The type and presentation of information to be included in
earnings press releases, including the use of "pro forma" or
"adjusted" non-GAAP information, as well as financial
information and earnings guidance provided to analysts and
rating agencies.
o The committee shall discuss with the independent auditors any
difficulties encountered by the auditor in the course of the audit
work, including any restrictions on the scope of activities or
access to requested information, any significant disagreements
with management, accounting adjustments that were noted or
proposed
B-4
by the auditor but were passed, any "management" or "internal
control" letter issued, or proposed to be issued, by the audit
firm to the Company.
o The committee shall review disclosures made to the Audit Committee
by the Company's CEO and CFO during their certification process
for the Annual Report on Form 10-K and Quarterly Report on Form
10-Q about any significant deficiencies in the design or operation
of internal controls or material weaknesses therein and any fraud
involving management or other employees who have a significant
role in the Company's internal controls.
o The committee shall oversee the Company's internal audit function,
review any significant reports to management arising from the
function and report to the full board any related issues.
o The committee shall ensure the rotation of the audit partners as
required by law and consider whether, in order to assure
continuing auditor independence, it is appropriate to adopt a
policy of rotating the independent auditing firm on a regular
basis.
o The committee shall review on a case by case basis the Company's
hiring of employees or former employees of the independent auditor
to ensure there is no issue with auditor independence resulting
from such hire.
B-5
JARDEN CORPORATION
ANNUAL MEETING OF STOCKHOLDERS, MAY 11, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Martin E. Franklin and Ian G.H. Ashken,
as proxies each with full power of substitution, and hereby authorizes them to
appear and vote as designated below, all shares of Common Stock of Jarden
Corporation held on record by the undersigned on April 8, 2004, at the Annual
Meeting of Stockholders to be held on May 11, 2004 at 555 Theodore Fremd Avenue,
Rye, NY 10580 and any adjournments or postponements thereof and upon any and all
matters which may properly be brought before the meeting or any adjournments or
postponements thereof, thereby revoking all former proxies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS.
The undersigned hereby directs this Proxy to be voted:
|X| Please mark votes as in this example.
1. Election of Directors
Ian G.H. Ashken
Richard L. Molen
|_| FOR |_| WITHHOLD AUTHORITY
the election as directors to vote for all nominees
of all nominees listed above listed above
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE. Write the name of the
nominee for which authority to vote is being withheld on the line below.
- --------------------------------------------------------------------------------
2. Ratification of the appointment of Ernst & Young LLP as Jarden
Corporation's independent auditors for 2004
|_| FOR |_| AGAINST |_| ABSTAIN
IMPORTANT: PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE.
(Continued from the other side)
3. In their discretion, the named proxies may vote on such other business as
may properly come before the Annual Meeting, or any adjournments or
postponements thereof.
|_| FOR |_| AGAINST |_| ABSTAIN
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this Proxy will be
voted for Proposals 1 and 2.
Shares represented by this Proxy will be voted at the meeting in accordance with
the stockholder's specifications above. The Proxy confers discretionary
authority in respect to matters not known or determined at the time of the
mailing of the notice of the Annual Meeting of Stockholders to the undersigned.
Date: , 2004
------------------------------
----------------------------------------
Signature of Stockholder
----------------------------------------
(Signature if held jointly)
Note: Please mark, sign, date and return
this Proxy promptly using the enclosed
envelope. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation or
partnership, please sign in corporate or
partnership name by an authorized person.